Bitcoin is currently testing a support zone formed at the $7,441 support, MA100 and 0.382 fibonacci level. This area needs to be maintained in order for the trend to continue.
In my previous report, I wrote about the chart pennant pattern and explained precisely which conditions are required for a bullish continuation to happen. It never reached the breakout confirmation zone and blew through the supportive level of the pattern.
I did write about the risks involved with the previous setup and pointed out the next attractive reversal zones when it starts pulling back.
Now that it is located in the attractive location for a reversal, it should be kept in mind that it is time to wait patiently for signals that support upward movement. Taking a trade without any valid setup is just adding randomness to your trades.
Very interesting here is that Moving Averages are getting closer, the longer term MAs (100,200) are curving downwards, while the shorter term (50) is curving upwards.
A close below could lead the price to test the previous support levels which are: $7,194 and $6,859 + located close to MA50 level.
MACD nor or RSI are favoring bulls right now but that can change in the shorter term. The RSI is below the 50 level and rejecting it could lead for further downward movement.
It is a waiting game for now and not taking a trade because it doesn’t add up with your setup is a good decision as well.
Overall, there is no doubt that the market is starting to provide more trading opportunities and it is giving a chance for those who are looking to increase their positions.
What I haven’t wrote about for a while is that the WAVE 4 often retraces to 0.382 fib level (where it is located right now) and that’s one reason why this area is attractive for a reversal.
For now it’s better to observe how the price evolves and which way it starts to favor more.
Here is my list of free trading tutorials:
Lesson 1 – Beginner’s Guide: How to use Moving Averages to Day Trade?
Lesson 2 – How to trade a selling climax with cryptocurrency?
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Things to Remember:
- Stop-loss orders are strongly recommended.
- Beware of buying tops or FOMOS, you might end up losing or waiting long periods of time before getting anything back.
- Do your homework before investing.
Please be aware this is not financial advice. You are responsible for your trading and investing decisions. It is highly recommended to do your own research before investing in anything.
Also published on Medium.